/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190304.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, March 4, 2019, Vol. 20, No. 45 Headlines B R A Z I L GERADORA EOLICA: Moody's Rates Sr. Secured Debentures Ba2 JBS SA: Barclays Steps in as Scandal Drives Away Wall Street Banks C A Y M A N I S L A N D S NOBLE HOLDING: Moody's Cuts CFR to Caa1 & Sr. Unsec. Notes to Caa2 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Lacks 8 Points on Free Trade With US DOMINICAN REPUBLIC: To Manage Longest River Basin for US$13.3MM DOMINICAN REPUBLIC: Unions Won't Budge on Severance Pay M E X I C O CIBANCO SA: Moody's Gives Ca (sf) Rating on BONHITO F1039 Certs GRUPO POSADAS: Moody's Affirms B2 CFR & Sr. Unsecured Ratings MEXICO: Making Progress Against Fuel Theft, President Says MEXICO: President Calls for Dialogue to Resolve Venezuelan Crisis W/S PACKAGING: S&P Raises CCR to 'B' on Improved Liquidity S U R I N A M E SURINAME: Moody's Alters Outlook on B2 Rating to Stable V E N E Z U E L A VENEZUELA: Guaido Plans Return; Maduro Expels Univision's Ramos VENEZUELA: Oil Supplies Hit 5-Year High as Buyers Become Elusive X X X X X X X X [*] BOND PRICING: For the Week February 25 to March 1, 2019 - - - - - =========== B R A Z I L =========== GERADORA EOLICA: Moody's Rates Sr. Secured Debentures Ba2 --------------------------------------------------------- Moody's America Latina Ltda. assigned a Ba2 global scale and Aa3.br national scale ratings to Geradora Eolica Bons Ventos da Serra 2 S.A.'s ("BVS 2", the "project" or the "issuer") BRL 56.5 million senior secured debentures due in 2033, to be issued in the form of infrastructure debentures pursuant to law 12,431. The outlook on the ratings is stable. This is the first time that Moody's assigns ratings to the project's securities. RATINGS RATIONALE The Ba2/Aa3.br ratings reflect BVS 2's long term project's revenue profile, composed of 20-year power purchase agreements (PPAs) set at fixed prices that are adjusted annually by inflation, which are at approximately BRL161/MWh in current prices. The project's PPAs were signed in New Energy Auctions (LEN), which benefit from a quadrennial revenue settlement mechanism to address the intermittent nature of the wind resource that allows one specific year of generation deficit to be compensated by another year's generation surplus within a four-year period prior to revenue deductions. The ratings are tempered by a diversified off-taker base that comprises 35 operating utilities in Brazil belonging to fifteen different economic groups. In Moody's view, the average off-takers credit quality is commensurate to Ba2. From a break-even perspective, Moody's considers that the project could withstand a default of up to 15% of its off-taker base and consequent replacement of the PPAs at the lowest price of BRL63/MWh without being insolvent, which helps mitigate counterparty risk. Despite the intermittent nature of the wind resources, the PPA commitments relative to different scenarios of power generation have sufficient margin, based on third party wind studies (Camargo Schubert and Inegi). Under Moody's base case, considering the average 1-yr P90 generation assumption during the debentures' tenor, the project generates a minimum and average DSCR levels of 1.11x and 1.41x, respectively, as per Moody's calculation standards. The minimum DSCR occurs in 2020, due to the expiration of the EPC guarantees to the wind turbines and the start of incremental expenses associated to O&M service agreement. After that the DSCR profile will range from 1.30x to 1.40x through 2030, with some volatility around the years of quadrennial settlements, but expanding to about 2.0x in the last three years prior to the final debt maturity. Moody's also estimates that the break even generation level is equivalent to 84% of the 1-yr P90. The project is located in an area with strong wind resources in the North of Brazil, but there is limited track record of operations. The project was planned to begin commercial operations in May 2018; however, due to some delays in the construction and assembly of the wind turbines, the project was fully operating with a two-month delay. Since July 2018, the project's accumulated net power generation was equivalent to 108.4% of the 1-yr P90. The ratings are constrained by the limited track record in operating performance of wind turbines supplied by WEG Equipamentos Eletricos S.A. (WEG), which is partially mitigated by a two year guarantee and an eight year fixed-price, inflation adjusted O&M agreement with this vendor. The O&M covers routine and planned maintenance, repair or replacement of wind turbine parts and periodical inspections. The contract also covers some unplanned maintenance services such as execute the initial evaluation and the problems resolutions evaluation to all damage covered units to ensure a minimum 97% availability, but it does not cover spare parts nor cranes. USE OF PROCEEDS Proceeds of the issuance will be used on the reimbursement of expenses, investments and debt incurred to support the project's construction. The debentures will benefit from real guarantees and rank pari-passu with the long-term loans granted by Banco Nacional de Desenvolvimento Economico e Social - BNDES (BNDES, Ba2 stable), in the total amount of BRL214.2 million, with final maturity in 2034. DEBT STRUCTURE & SECURITY The fully-amortizing debentures will have a 14-year maturity with customized bi-annual amortization schedule. The debentures will benefit from a 6-month DSRA and a 3-month O&M reserve account with standard project finance security package shared between the indenture and the BNDES loan, including: (i) pledge of shares from the sponsors; (ii) pledge of all plant & equipment and rights on the O&M agreement; (iii) fiduciary assignment of the credit right of receivables from the LEN auction contracts and any other further contracts of energy traded in the free and/ or regulated market; and (iv) fiduciary assignment of all credit deposited in the centralizing accounts, in the debt service reserve account and O&M reserve account. The debenture holders will also benefit from an unconditional and irrevocable bank guarantee from Itau Unibanco S.A. (Ba2, stable) to mitigate ramp-up risks until the project achieves certain operating and financial standards for twelve consecutive months. The debentures will have usual and customary project finance covenants, such as (i) indebtedness limitation so that the project cannot issue new debt; (ii) restrictions to change of direct and indirect control, unless if previously approved; and (iii) limitations clauses on dividend distribution and intercompany loans. There is also a requirement for the project to maintain a minimum DSCR of 1.2x measured on an annual basis. The debentures will be issued by March 15, 2019. The assigned ratings are based on preliminary documentation. Moody's does not anticipate changes in the main conditions that the debentures will carry. Should issuance conditions and/or final documentation deviate from the original ones submitted and reviewed by the rating agency, Moody's will assess the impact that these differences may have on the ratings and act accordingly. OUTLOOK The stable outlook reflects Moody's view that the BVS 2 project will generate cash flows that are enough to cover its projected debt service over the next 12 to 18 months, while ensuring that its financial metrics remain well positioned for its current rating category FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE Positive rating pressure would increase if the wind sources demonstrate sustainably higher than anticipated revenues that yield a Moody's DSCR that approaches or exceeds 1.45x consistently. An upgrade would also depend on the operating performance of turbines to be in line with expectations for a prolonged period. The rating could be downgraded if, after achieving completion, followed by the release of the bank guarantees, Moody's sees a significant and sustained deterioration in BVS 2's credit metrics such as the Moody's DSCR falls below 1.20x or if operational performance is consistently below its expectations leading to a covenant breach. A deterioration in the off-takers base credit quality could increase negative rating pressure, as well as Moody's perception of a decline in the level of consistency and predictability of the Brazilian business environment for the electricity sector. ISSUER PROFILE BVS 2 is an operational holding company owner of five wind clusters authorized by Aneel/Ministry of Energy and Mining to operate as wind farm producers, forming the BVS 2 complex. Located in the municipalities of Ubajara and Ibiapina, in the Northeastern State of Ceara, the project has a total installed capacity of 86.1MW, composed of 41 wind turbines generators (WTGs) supplied by WEG of 2.1MW (Model AGW110-120m) each. The project, which reached 100% official commercial operations date in July 2018, is sponsored by Servtec Investimentos e Participacoes Ltda. (50%) and Nexus Investimentos e Participacoes Ltda (50%). METHODOLOGY The principal methodology used in these ratings was Power Generation Projects published in June 2018. JBS SA: Barclays Steps in as Scandal Drives Away Wall Street Banks ------------------------------------------------------------------ Cristiane Lucchesi and Gerson Freitas Jr. at Bloomberg News report that Barclays Plc has emerged as the go-to bank for the world's largest meat supplier after scandals at the company pushed Wall Street to the sidelines. JBS SA and its subsidiaries have sold at least four overseas bond deals totaling $2.75 billion since 2017, when the Brazilian powerhouse's owners became embroiled in allegations of corruption, according to Bloomberg News. Barclays underwrote all of them. And another windfall could be on the way: The London-based bank is a top candidate to handle JBS's planned initial public offering in the U.S., according to people familiar with the matter, Bloomberg News says. The company's previous banks, including JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, have backed off, Bloomberg News notes. That's because JBS is controlled by Wesley and Joesley Batista, the billionaire brothers who confessed to bribing more than 1,800 politicians in Brazil, Bloomberg News discloses. While JBS's parent company agreed in 2017 to pay BRL10.3 billion ($2.8 billion) as part of a leniency agreement with Brazilian prosecutors, no deal has yet been reached with the U.S. Department of Justice to avoid prosecution under U.S. anti-bribery laws, Bloomberg News notes. JBS has taken steps in the wake of the scandal that may assuage the concerns of compliance teams from banks, including the agreement with Brazil prosecutors, improved corporate-governance practices and the removal from management of the Batista brothers and other executives, the people said, Bloomberg News says. Barclays Chief Executive Officer Jes Staley, in charge since 2015, has been pushing the lender's investment-banking unit to take more "measured risk" to boost returns, Bloomberg News discloses. The firm has gained market share across trading and banking businesses, unlike many of its European rivals, helped by its prowess as an arranger of debt sales for clients, a Feb. 21 presentation shows, Bloomberg News says. A representative of Barclays declined to comment on the JBS relationship, as did officials at Morgan Stanley, JPMorgan and Bank of America. JBS declined to comment on its relationships with banks or the progress of talks with the Justice Department. JBS, which has most of its operations in the U.S., is resuming plans for a listing in New York as a way to access cheaper financing, Bloomberg News relays. In 2016, before the scandal broke, the idea was to take public a unit comprising JBS's non-Brazilian businesses and the domestic foodmaker Seara Alimentos Ltda. While Morgan Stanley had been hired to handle that deal, it's now less likely the New York-based company will get the business if the meat producer doesn't reach a legal agreement in the U.S., the people said, Bloomberg News notes. Underwriting Rankings Morgan Stanley was the top equity underwriter in the U.S. last year, according to data compiled by Bloomberg. Barclays ranked sixth, after JPMorgan and Bank of America, Bloomberg News says. Before 2017, Barclays already had a relationship with JBS, participating in five of 14 bond deals by JBS companies, while JPMorgan underwrote at least 10, according to data compiled by Bloomberg. Bank of America handled four and Morgan Stanley, three. JBS is facing challenges aside from a shorter list of banks willing to handle its transactions or provide credit, Bloomberg News discloses. The failure to reach an agreement with the Department of Justice may also make it hard for the company to access some investors who would otherwise participate in an IPO, the people said, Bloomberg News notes. Relations between JBS and JPMorgan and Morgan Stanley were shaken in June 2014, when those banks helped Tyson Foods Inc. counter JBS's acquisition bid for Hillshire Brands Co., the maker of Jimmy Dean sausages and Ball Park hot dogs, people familiar with the matter said at the time, Bloomberg News relays. Tyson won the transaction and JBS fired JPMorgan from a share offering and Morgan Stanley from a bond deal, Bloomberg News notes. Barclays and Bank of America got JBS bond deals at the time, and the firm's ties to Morgan Stanley improved again in subsequent years, as the bank was hired for a 2015 debt issuance and also for the 2016 IPO plan, Bloomberg News says. JPMorgan, the more frequent underwriter before the 2014 event, never again participated in a bond deal from the firm, Bloomberg News relates. JBS expects to reach an agreement with U.S. authorities by the time it's ready to go to market with its IPO, though such a deal won't be a precondition for the share sale as the company has been showing improving profits and reduced leverage, another person said. Bloomberg News notes. While Barclays was the only bank to work on every JBS bond sale since 2017, other firms participating on the various transactions included Rabobank, Royal Bank of Canada, BB Securities, Banco Bradesco BBI SA, Banco BTG Pactual SA, Banco Santander SA and Bank of Montreal, data compiled by Bloomberg show. =========================== C A Y M A N I S L A N D S =========================== NOBLE HOLDING: Moody's Cuts CFR to Caa1 & Sr. Unsec. Notes to Caa2 ------------------------------------------------------------------ Moody's Investors Service downgraded Noble Holding International Limited's (Noble) Corporate Family Rating (CFR) to Caa1 from B3, its senior unsecured notes ratings to Caa2 from Caa1, and its senior guaranteed notes to B3 from B2. Noble's Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-2. The rating outlook was changed to stable from negative. Noble is an indirect wholly owned subsidiary of Noble Corporation plc, a publicly traded offshore drilling company. "The downgrade of Noble reflects further declines in its cash flow for 2019 leading to negative free cash flow and diminishing, albeit still adequate liquidity," said Pete Speer, Moody's Senior Vice President. "While the company's earnings look likely to bottom this year and begin to improve in 2020, the pace of earnings improvement looks to be slow absent a much stronger recovery in dayrates than we anticipate." Downgrades: Issuer: Noble Holding International Limited - Probability of Default Rating, Downgraded to Caa1-PD from B3-PD - Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 - Corporate Family Rating, Downgraded to Caa1 from B3 - Gtd. Senior Unsecured Notes, Downgraded to B3(LGD3) from B2 (LGD3) - Senior Unsecured Notes, Downgraded to Caa2 (LGD5) from Caa1 (LGD5) Outlook Actions: Issuer: Noble Holding International Limited - Outlook, Changed To Stable From Negative RATINGS RATIONALE Noble's Caa1 CFR reflects the company's very high debt levels, weak margins, cash flow that is insufficient to cover interest and rising negative free cash flow to fund necessary capital investment to maintain fleet competitiveness. Dayrates for jackup rigs are rising and dayrates for floating rigs have bottomed, with the company experiencing rising contracting success and fleet utilization. However, these underlying improvements in business fundamentals are being more than offset in 2019 by the expiration of a very high dayrate contract on a single deepwater drillship and current market dayrates for floating rigs that yield narrow margins. The Caa1 rating is supported by Noble's adequate liquidity and manageable debt maturities through 2022. Noble's SGL-3 rating reflects the company's adequate liquidity through mid-2020. At December 31, 2018, the company had $375 million of cash and its combined $1.8 billion of unsecured revolving credit facilities were undrawn. The company's primary credit facility is $1.5 billion and matures in January 2023, while the other $300 million credit facility matures in January 2020. The $1.5 billion revolver has a minimum liquidity covenant of $300 million (cash and available borrowing capacity under revolver), maximum consolidated indebtedness to total capitalization of 55%, minimum rig value to total revolver commitments and other loan parties debt of 3x, and minimum value of rigs wholly owned by the subsidiary guarantors to total rig value of 80% (as defined in the agreement). Moody's expects that the company will maintain adequate headroom for future compliance with these covenants into 2020, however, the debt to total capitalization covenant will effectively limit the company's access to its revolver to less than the committed amount. Moody's expects Noble to generate significant negative free cash flow in 2019, based on its limited operating cash flow and planned cash capital spending of $250 million. The company has about $66 million and $96 million of senior notes maturing in 2019 and 2020. Noble's cash balance and effective borrowing capacity on its revolver provide adequate liquidity for these requirements, other working capital needs and its announced tender offer for senior notes with an aggregate maximum purchase price of $400 million that is expected to conclude in March 2019. The outlook is stable based on the Noble's adequate liquidity and Moody's expectation that cash flow will rise in 2020 as dayrates and utilization continue to improve, although the pace of improvement will be slow. The ratings could be downgraded if liquidity becomes weak, if improving fundamental trends in the business reverse or if the company incurs a material adverse loss related to the ongoing Paragon Offshore litigation. In order to consider a ratings upgrade, Noble will have to achieve substantial increases in EBITDA in an improving offshore drilling market such that it can generate positive free cash flow with interest coverage (EBITDA/Interest) exceeding 1.5x with increasing amounts of available liquidity. Noble's senior notes are rated Caa2, or one notch beneath the Caa1 CFR in accordance with Moody's Loss Given Default Methodology. This is because the senior notes are structurally subordinated to the $1.5 billion revolving credit facility. The primary borrower under that credit facility is an intermediate holding company subsidiary of Noble that is structurally closer to the operating subsidiaries and benefits from operating subsidiary guarantees that provide the revolver with a structurally superior claim to the large majority of Noble's drilling rigs. Noble's $750 million senior guaranteed notes due 2026 are rated B3, or one notch above the Caa1 CFR, reflecting these notes' structurally superior position in Noble's capital structure relative to the senior unsecured notes. These notes are senior unsecured but are guaranteed by intermediate holding company subsidiaries, effectively giving these notes a priority claim to the company's assets over Noble's other senior unsecured notes outstanding that do not have subsidiary guarantees. However, these notes are structurally subordinated to the company's $1.5 billion revolving credit facility. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. Noble Holding International Limited is a wholly owned subsidiary of Noble Corporation, a Cayman Island company (Noble-Cayman), which is a wholly owned subsidiary of Noble Corporation plc (Noble plc), a company incorporated under the laws of England and Wales, and a leading international offshore oil and gas drilling contractor. Noble Holding International Limited is the issuer of the of the company's rated debt, and therefore the CFR is assigned to that company. Noble Holding International Limited's senior notes are fully and unconditionally guaranteed by Noble-Cayman. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Lacks 8 Points on Free Trade With US -------------------------------------------------------- Dominican Today reports that though not in a "red list" the country appears in a document from the Office of the United States Trade Representative (USTR) with eight points that US businesses say are not met, within the US-Central America-Dominican Republic (DR-Cafta) Free Trade Agreement. Those eight points are closely related to trade facilitation or "technical barriers" to trade, according to the US companies that demands to the USTR, revealed at the meeting on Globalization, David Lewis, vice president of the North American consulting firm Manchester Trade, according to Dominican Today. He said the eight points are: -- for a claim of delay in the processing of rods exported by American companies to the Dominican Republic and that they claim that it's a technical barrier; -- a second point has to do with food labeling requirements, in Spanish; -- a third is the import quotas for agro products and the allocation of grains, beans and dairy products, which they say is very discretionary; -- a fourth point is that of used vehicles, which they say are blocked from entering this country and understand that the rules of origin to liberalize tariffs aren't clear. -- a fifth point is a claim of lack of transparency in public purchases; -- a sixth, due to problems with the issue of intellectual property, especially with the satellite signal, software and licenses, counterfeit products and patents; -- a seventh, on telecommunications, specifically in the interest of knowing who are the suppliers and concessions; and -- the last point listed in the USTR by US companies involved in the trade relationship with this country is a concern for a perception of corruption and the rule of law. Lewis provided the details during his participation in the meeting on Globalization, coordinated by economist Juan Guiliani Cury for outlet Listin, and special guest, the economist, Luis Manuel Piantini, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: To Manage Longest River Basin for US$13.3MM --------------------------------------------------------------- Dominican Today reports that President Danilo Medina on July 8, 2018, approved the Presidential Commission's proposal to manage the Yaque del Norte River Basin (CRYN), at a cost of RD$664.5 million (US$13.3 million). When asked about the works being carried out, Plan Sierra vice president and of CRYN director, Inmaculada Adames said that it's necessary to know in detail the plan to manage Yaque del Norte's middle basin, which began with executive order 57-18, according to Dominican Today. "We cannot speak of a massive and rapid intervention of a basin, because we are talking about a lot of time and resources, but we will continue advancing in the same measure that the financing and the empowerment of the actors is achieved," Adames told Listin Diario, accompanied by Cibao Ecologic Society (Soeci) director, Luis Polanco, the report notes. The country's largest water source of over 300 kilometers is born in the Cordillera Central, at an altitude of 2,580 meters above sea level. It supplies water to two of the country's biggest cities: Moca and Sangiao. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: Unions Won't Budge on Severance Pay ------------------------------------------------------- Dominican Today reports that the labor unions reiterated that they won't allow amendments to the Dominican Labor Code that would hinder workers' rights. At the end of a meeting in the Labor Ministry, union leader Rafael "Pepe" Abreu, said they want employers to understand that "our position is that there are several points of the Dominican Labor Code that will not be modified under any circumstances," according to Dominican Today He said they'll never accept changes that affect workers' severance pay or changes in working hours, the report relays. Mr. Abreu also warned that they won't accept contractual modifications that harm youngsters or pave the way to displace Dominicans by foreigners in all professions, as he affirms employers want, the report notes. "Nor will we accept under any circumstances, changes that imply denial of rights to motherhood guaranteed by international agreements in our own code," the report quoted Mr. Abreu as saying. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. =========== M E X I C O =========== CIBANCO SA: Moody's Gives Ca (sf) Rating on BONHITO F1039 Certs --------------------------------------------------------------- Moody's de Mexico, S.A. de C.V. has assigned ratings of Ca (sf) (Global Scale, Local Currency) and Ca.mx (sf) (Mexican National Scale) to the BONHITO F1039 certificates. The BONHITO F1039 certificates were issued in April 2009 by Cibanco S.A., Instit. de Banca Mult., Fiduc. (formerly The Bank of New York Mellon, S.A., Institucion de Banca Multiple)., acting as trustee. The certificates were issued in connection with a pass-through repackaged security transaction (BONHITO F1039). RATINGS RATIONALE The assigned ratings are primarily based on the following factors: - The low credit quality of the two RMBS senior certificates that collateralize the BONHITO F1039 repack securities; these certificates are in turn collateralized by two underlying pools comprised of fixed-rate, first-lien, MXN peso denominated residential mortgage loans secured primarily by low-income housing in Mexico. - The high level of defaulted loans, which equals 55% as a percentage of the total underlying pool balance. Moody's notes that the balance of performing loans (less than 180 days delinquent) is low at MXN 131.6 million as compared to the rated BONHITO F1039 certificate's balance of MXN 203.7 million pesos. - The relatively low expected recovery rate on the rated certificates. - The well-established Mexican laws governing mortgage securitization. - The pass-through structure of the Bonhito Master Trust and the full turbo waterfall transaction structures of the two underlying RMBS trusts. - The adequate servicer quality assessment. The Issuing Trust F1039 is backed by the cash flows from two private RMBS Senior certificates issued by two separate underlying trusts: Capital Center Trust 865 and Capital Center Trust 874. These Capital Center Trusts (CCT), in turn, are backed by separate static pools of residential mortgage loans originated by three now defunct, non-bank, lenders known as Sofoles: Credito Inmobiliario, S.A. de C.V.; Hipotecario Credito y Casa, S.A. de C.V. and Hipotecaria Su Casita, S.A. de C.V., SOFOM. The Senior certificates issued by each underlying trust are fully pledged to the Bonhito Master Trust, which issued the BONHITO F1039 certificates (BONHITOs) to which Moody's has assigned ratings. As of the December 2018 reporting date, the pool backing the CCT 874 had a weighted average coupon of 12.1%, weighted average seasoning of 10.8 years, and a current Loan-to-Value (LTV) of 73.7%. With respect to geographic concentration, the mortgages are concentrated mainly in the state of Mexico (18.4% of the outstanding pool), followed by Ciudad de Mexico (16.1%) and Baja California Sur (9.5%). The top five states account for 61% of the outstanding pool balance. At the same date, the pool backing the CCT 865 trust had a weighted average coupon of 11.8%, weighted average seasoning of 11.1 years, and a current Loan-to-Value (LTV) of approximately 81.5%. With respect to geographic concentration, the mortgages are concentrated mainly in the state of Quintana Roo (23.5% of the outstanding pool), followed by CDMX (20.8%) and Jalisco (9.3%). The top five states account for 63% of the outstanding pool balance The combined underlying collateral pool has exhibited very weak performance, with 55% of the outstanding pool having a delinquency greater than 180 days. This amount represents 22% of the original pool balance. Additionally, the ongoing implementation of loan modification products is expected to have limited impact considering the high share of defaulted borrowers that the servicers considers to have low willingness to pay. Finally, both underlying pools backing capital center trusts 874 and 865 have zero balance of real estate owned as of December 2018. The Senior certificates issued by CCT 874 are expected to be fully paid off within the next 12 to 18 months, after which proceeds from the underlying pool will be used to pay subordinate certificates from CCT 874; Class B was not pledged as collateral to the repack transaction. Any remaining cashflows could be used to cross-collateralize the remaining trust (CCT 865). However, considering the high share of defaulted loans in the underlying pool backing CCT 874 and the relatively small share that any remaining balance, if any, would represent of BONHITO F1039 certificates, Moody's has not provided credit to any potential cross-collateralization. The issuing Trust F1039 currently has cash holdings of MXN 13 million pesos, equivalent to 6.4% of the Bonhito certificate balance; however, this amount will be released in accordance to the repack transaction's waterfall after the payment of scheduled payments upon agreement in shareholder meeting, though ultimately, this payment will not result in a change to the assigned ratings. The assigned ratings reflect the weighted average expected loss on the Bonhito F1039 certificates, considering the expected losses on the two underlying private certificates which collateralize it. Though certain loans in the transaction benefit from loan-level mortgage insurance policies issued by Sociedad Hipotecaria Federal, S.N.C., Moody's credit analysis did not give credit to these since it does not anticipate material cash flows deriving from the policies. The mortgage originators including Credito Inmobiliario, S.A. de C.V.; Hipotecaria Credito y Casa, S.A. de C.V. and Hipotecaria Su Casita, S.A. de C.V., SOFOM. These originators ceased to exist soon after the transaction closed. Currently, the servicer is Pendulum S. de R.L. de C.V., who assumed the role of servicer in December 2011 and has since taken steps to improve performance and recoveries. The master servicer of the transaction is Hito, S.A.P.I de C.V. Moody's believes that the servicer quality is appropriate. Factors that would lead to an upgrade or downgrade of the ratings: Factors that would lead to an upgrade - An improvement in the credit quality of the senior underlying certificates consistent with a one notch rating impact. Factors that would lead to a downgrade - Deterioration in the credit quality of the underlying certificates consistent with a one notch rating impact. The period of time covered in the financial information used to determine the BONHITO F1039 ratings is between March 1st, 2009 and December 31st, 2018. Rating Methodology: The principal methodology used in these ratings was "Moody's Approach to Rating Repackaged Securities" published in June 2015. GRUPO POSADAS: Moody's Affirms B2 CFR & Sr. Unsecured Ratings ------------------------------------------------------------- Moody's Investors Service affirmed Grupo Posadas, S.A.B. de C.V.'s (Posadas) B2 corporate family and senior unsecured ratings on its 2022 notes. The outlook continues to be positive. Affirmed: Issuer: Grupo Posadas, S.A.B. de C.V. - Corporate Family Rating, B2 - Senior Unsecured Regular Bond/Debenture, B2 Outlook: Positive RATINGS RATIONALE "Posadas' B2 rating balances the measures the company has recently taken to improve its capital structure and liquidity profile, with challenges envisioned ahead, mainly related with global economic deceleration and tightening conditions in the Mexican tourism sector." says Sandra Beltran, a lead analyst at Moody's. Since Moody's changed the outlook to positive from stable in 2016, it considered that the refinancing of its senior notes due in 2017, coupled with better operating performance, was going to accelerate Posadas deleveraging. However, leverage has remained well above Moody's original expectations mainly as a consequence of the Mexican peso depreciation as well as asset sales and refurbishments that temporarily reduced its EBITDA generation. Leverage will remain high over the next few years affected by an increase in lease expenses related with recently renewed contracts and the IFRS 16 requirement to have such expenses capitalized at present value. Due to this change in accounting rules, adjusted Debt / EBITDA will continue in the 5.0x -- 5.5x range on a sustained basis. Despite the high leverage, Posadas credit metrics are comparable with those of other rated peers in the B1 category, such as Radisson Hospitality AB (B1, stable) and NH Hotel Group S.A. (B1, stable). On the other hand, the expected deceleration in both the US' and Mexico's economies through 2020 will put pressure on Posadas operating performance. Moody's expects Mexico's GDP to grow at a 2.2% in real terms during 2019 and 2.3% in the US. For 2020, Moody's expects both country's GDP to grow at 1.5%. Moreover, although the Mexican tourism sector has gained momentum in recent years, evidenced by the constant improvements in its positioning in UN's World Tourism Organization (WTO) global ranking of foreign tourist destinations, Moody's sees the risk of some deceleration in the next couple of years. Accordingly, an increase in criminality in main coastal regions of Los Cabos and Cancun, if sustained, could take its toll on lodging companies operating in Mexico. Events such as a reduction in the budget to promote Mexico tourism abroad and the cancellation of Mexico City airport could also impact the sector in the long run. Over the next several quarters, we'll monitor Posadas ability to deploy recently added capacity, specifically with the opening of the Live Aqua Residence Club San Miguel de Allende and the reopening of the Live Aqua Beach Resort Cancun. The company will also need to refinance ahead 2022 maturities and secure funding for its project for the Fiesta Americana Reforma hotel in Mexico City. Posadas' B2 rating continues to reflect its small operating scale relative to global industry peers, and low geographic diversification as it operates almost entirely in Mexico. Balancing these negative are the company's leading position, brand equity and nationwide coverage in Mexico, a large and leading tourism market. Also supporting Posadas' B2 rating is its segment diversification across different hotel classes, varying business models and service business growth. Also positive credit factor is the stability of earnings and higher profitability resulting from loyalty programs and high share of direct channels. Posadas' liquidity is adequate. As of December 31, 2018, Posadas cash balance was around MXN2.7 billion. Cash in hand and funds generated by the operation should be enough to cover the USD 26.7 million prepayment of its senior notes, under a recently launched offering, and to internally fund cash needs through 2020, including capex in line with its growth strategy. Capital investments in 2019 are expected at of MXN767 million (around USD40 million) and MXN1.6 billion in 2020. Limiting Moody's assessment of Posadas' liquidity is its still high exposure to the depreciation of the local currency given the currency mismatch between its cash generation and debt. Currently, the bulk of Posadas' debt is denominated in US dollars and only close to 30% of its revenues are in US dollars. Posadas positive outlook reflects Moody's expectations that operating performance will continue to be strong, mainly supported by high occupancy rates and incremental cash generation from recently opened hotels and resorts. The positive outlook also considers that during the next 12 -- 18 months Posadas will be able to timely refinance the USD375 -- USD400 million senior notes due 2022. An upgrade would be dependent on Posadas maintaining adequate liquidity and improving adjusted EBITA margins above 15% from current 13.5%. Likewise, adjusted Debt/EBITDA should decline towards 5.0 times and EBIT/Interest improve to close 2.0 times, both on a sustained basis. For a positive pressure to arise, liquidity will need to be adequate with a timely refinance of its 2022 maturities. Ratings could be downgraded if Posadas' liquidity deteriorates or if Moody's adjusted debt/EBITDA is sustainably above 5.5 times and coverage reverts to below 1.5 times, with retained cash flow to net debt remaining below 10% on a sustained basis. Negative pressure will also arise as a result of any liquidity challenges or more aggressive financial policy. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Grupo Posadas, S.A.B. de C.V. (Posadas), is a leading hotel operator in Mexico. The company operates hotel under the upper brands Fiesta Americana and Explorean, middle economy brands Fiesta Inn and One hotels, luxury brands Live Aqua and Grand Fiesta Americana, the Fiesta Americana Vacation Club timeshare business and a franchise business under the brand Gamma. Posadas recently announced its entry into other Caribbean markets such as Cuba and the Dominican Republic through three managed properties. The company owns, leases and manages 175 hotels with 27,491 rooms in well-located urban and costal destinations in Mexico. In 2018, Posadas reported revenue of MXN7,910 million, excluding asset sales. MEXICO: Making Progress Against Fuel Theft, President Says ---------------------------------------------------------- EFE News reports that Mexican President Andres Manuel Lopez Obrador said that while much work remained to be done, his administration's efforts to fight fuel theft were already saving state-owned Petroleos Mexicanos (Pemex) MXN50 billion (about $2.6 billion). "Fuel theft has not been completely eradicated. There are still some clandestine taps and we're continuing the operation. It's going to continue. We're not going to get distracted and let down our guard. We're going to stick to the whole plan," the president said in a press conference at the National Palace, according to EFE News. When the president took office on Dec. 1, he launched a fight against fuel theft, a crime that has plagued Pemex for years and produced losses of MX65 billion pesos ($3.4 billion) in 2018 alone, the report relays. The report discloses that the government marked the two-month anniversary of the start of the operation targeting fuel theft, an effort that led to tighter pipeline security and changed the way Pemex delivers fuel to service stations. The government shut down pipelines and delivered fuel using tanker trucks, a change in operations that led to shortages in many states and caused panic buying by motorists, the report relays. "There was resistance and sabotage, but there is now fuel in all the country. We had a tough time," Lopez Obrador, leader of the leftist National Regenertion Movement (Morena), said, the report notes. The president thanked Mexicans for behaving "well" and supporting the plan, which is producing results, the report says. "We managed to reduce fuel theft considerably. If we keep going the way we are, we can save nearly 50 billion pesos ($2.6 billion). Money that belongs to the people and will return to the people," Lopez Obrador said, the report discloses. Pemex CEO Octavio Romero, for his part, said fuel theft dropped from an average of 56,000 barrels per day (bpd) in 2018 to about 8,000 bpd this month, the report notes. The situation is "nearly back to normal" in the majority of states where shortages occurred, the Pemex chief said, the report says. EFE relays Defense Secretary Luis Cresencio Sandoval said the more than 8,000 security forces members deployed to protect pipelines and roads found 1,260 illegal fuel taps, seized 689 vehicles and confiscated nearly 2,000 containers. Some 4,000 marines are protecting pipelines, Navy Secretary Jose Rafael Ojeda said, the report discloses. Since the operation was launched, 137,000 people have been stopped and questioned, and five boats and 23,000 vehicles have been inspected, the navy secretary said, the report notes. Security and Citizens Protection Secretary Alfonso Durazo said the operations conducted by the security forces have resulted in 175 arrests, the seizure of 1,411 vehicles and the confiscation of millions of liters of stolen fuel, the report relays. Authorities froze the accounts of 226 people, taking control of MXN925 million ($48.2 million) and more than 738,000 dollars in cash, Finance and Public Credit Secretariat Financial Intelligence Unit chief Santiago Nieto said, the report notes. The government unveiled an aid package totaling MXN107 billion ($5.5 billion) to bolster Pemex, which is struggling with sky-high debt and has seen its output plummet over the past 15 years, the report discloses. "We'll be presenting what will be the first injection of funds to support Pemex," Lopez Obrador said following the announcement. "If more is needed, we'll allocate more funds," the report adds. Pemex, whose debt totals around $106 billion, is in a precarious situation due to, among other reasons, a steep drop in production to an average of just 1.71 million bpd in December, down from 3.38 million bpd in 2004, the report notes. The company also suffers from aging infrastructure, while budget cuts by the previous administration slashed funds needed for oil exploration, the report adds. MEXICO: President Calls for Dialogue to Resolve Venezuelan Crisis ----------------------------------------------------------------- EFE News reports that Mexican President Andres Manuel Lopez Obrador called for dialogue to find a "peaceful solution" to the crisis in Venezuela and defended freedom of speech after a crew from the Univision network was briefly detained in the South American country while interviewing the president. "I respectfully call on the parties to the conflict to sit down, dialogue and seek a peaceful solution," the founder and leader of the leftist National Regeneration Movement (Morena) said in a press conference at the National Palace, according to EFE News. If the parties request it, Lopez Obrador, popularly known as AMLO, offered to host talks in Mexico, allowing the two sides in the Venezuelan political crisis to find a solution, with the idea of having both Pope Francis and world-renowned diplomats as mediators, the report notes. "If the parties ask us, Mexico will always be willing to help in having a dialogue. To achieve peace in any nation, the doors of our country are open for dialogue," the president said, the report relays. AMLO said that if the dialogue were to happen, diplomats with "world prestige" would be invited as "intermediaries," along with the United Nations or Uruguay, a country with a similar neutral position like Mexico's on the Venezuelan crisis, the report relays. "Even Pope Francis (could be a mediator), because he has already done so," the president said, noting that the pontiff played a role in diplomatic matters involving Cuba and the peace process in Colombia, the report discloses. Asked about US Vice President Mike Pence's call for the Mexican government to take sides between Venezuela's self-proclaimed interim president, Juan Guaido, and President Nicolas Maduro, Lopez Obrador limited himself to emphasizing the existing "respect" between the United States and Mexico, the report says. "We have not had any kind of pressure," the president said, adding that polarization, confrontation and manipulation should be avoided, the report notes. Dozens of countries, including Brazil, Chile, Colombia, Spain and the United States, have recognized Guaido as Venezuela's legitimate president, the report discloses. The report says that Lopez Obrador said his administration would defend freedom of speech and freedom of the press after renowned Mexican-American journalist Jorge Ramos and his Univision crew were detained by Maduro's security forces during an interview at the Miraflores Palace. "We are in favor of the freedom of speech and the respect that must exist for the free practice of journalism in Mexico and in the world. That's what I can say," the Mexican leader said, the report relays. Venezuela's opposition does not recognize Maduro's May 2018 re-election victory and his new six-year term in office that began on Jan. 10, the report notes. The political crisis heated up on Jan. 23 when Guaido, the National Assembly's speaker, proclaimed himself the South American country's legitimate leader, the report adds. W/S PACKAGING: S&P Raises CCR to 'B' on Improved Liquidity ---------------------------------------------------------- S&P Global Ratings raised its corporate credit rating on Green Bay, Wis.-based W/S Packaging Holdings Inc. to 'B' from 'CCC' and removed the rating from CreditWatch, where S&P placed it with positive implications on Feb. 16, 2018. The outlook is stable. S&P said, "At the same time, we assigned our 'B' issue-level rating and '4' recovery rating to the company's $250 million senior secured notes. The '4' recovery rating indicates our expectation for average (30%-50%; rounded estimate: 40%) recovery in the event of a payment default. "The upgrade reflects our belief that W/S Packaging has sufficient headroom under the financial covenants in its new capital structure given the covenant-lite terms of the senior secured notes and the springing fixed-charge covenant under its unrated asset-based lending (ABL) facility." W/S Packaging Holdings Inc. produces pressure-sensitive labels, flexible film packaging, and other value-added packaging solutions in North America. Approximately 40% of the company's revenue comes from the beverage, dairy, and food end markets while the remainder is derived from various forms of consumer packaged goods (CPG), including consumer durables, household items, and health and beauty products. Pressure-sensitive labels account for approximately 64% of the company's revenue, followed by other label types (13%), cartons (8%), and other products (the remaining 15%). The company sells the vast majority of its products in the U.S. and less than 5% of its revenue is derived from Canada, Europe, and Mexico. The stable outlook on W/S Packaging reflects our expectation that the company's debt leverage will improve below 6x while it seeks to expand its EBITDA margins through operational improvements, including a more targeted customer mix, procurement savings, and other operational efficiencies. S&P also anticipates that the company will be able to maintain adequate liquidity over the next 12-18 months. S&P said "We could lower our ratings on W/S over the next year if the company's operating performance declines and causes its adjusted debt-to-EBITDA to increase above 7.0x on a sustained basis. This decline could be due to a failure to properly implement management's operational improvements, reduced demand for the company's products, and/or aggressive financial policies (such as debt-funded acquisitions or a debt-funded dividend). Furthermore, if W/S' free cash flow begins to deteriorate it could indicate that its liquidity position has weakened, which could also lead us to downgrade the company. "While unlikely, we could raise our ratings on W/S by one notch if the company meaningfully improves its scale, diversity, or profitability in the labels and packaging industry. We would consider an upgrade if the company's financial sponsor aggressively pays down its debt, causing its debt-to-EBITDA to improve below 5.0x on a sustained basis." =============== S U R I N A M E =============== SURINAME: Moody's Alters Outlook on B2 Rating to Stable ------------------------------------------------------- Moody's Investors Service has changed the outlook on the Government of Suriname's ratings to stable from negative and affirmed the B2 issuer and senior unsecured ratings. The decision to change the outlook to stable reflects Moody's view that liquidity pressures have subsided over the past year, and that increased scope for financing from domestic and external sources will ease funding pressures in 2019 and 2020. As a result, even taking into account a relatively gradual pace of fiscal consolidation, risks of increased liquidity pressures building up are now more contained than what the rating agency had assumed in February 2018 when it assigned the negative outlook. Moody's decision to affirm the B2 rating is supported by the country's sizeable mining and hydrocarbon resources, favorable investment environment driven by mining activity, and improved external accounts. The credit challenges acting as a constraint on the rating include a high debt burden and weak debt affordability, structural and economic vulnerabilities due to the country's small size and commodity dependence, and weaknesses in governance. The local-currency bond and deposit ceilings remain unchanged at Ba2. The foreign-currency bond ceiling is unchanged at Ba3 and the foreign-currency deposit ceiling is unchanged at B3. In addition, the short-term foreign currency bond and deposit ceilings remain at Not Prime. RATINGS RATIONALE RATIONALE FOR THE STABLE OUTLOOK LOWER SUSCEPTIBILITY TO EVENT RISK DRIVEN BY IMPROVED LIQUIDITY POSITION OF THE GOVERNMENT Downside risks related to government liquidity challenges have eased, driven by improved domestic funding conditions and increased access to concessional external funding. Reduced gross and net financing needs also contribute to the sustained improvement in the government liquidity situation going forward. In 2018, despite an estimated primary deficit of 4.4% of GDP, the government used the proceeds from the loan repayment by state-owned energy company, Staatsolie, to pay down existing debt and meet most of its net financing needs. Moody's estimates the government still has around $100 million, or 2.5% of GDP, available in deposits at the central bank for use to cover part of its financing needs in 2019. The government will also rely on a combination of domestic and external financing. Given Moody's expectations for a narrowing fiscal deficit, the rating agency anticipates this strategy will not place upward pressure on borrowing costs in the domestic market or increase rollover risk. Moody's expects short-term domestic debt, which mostly comprises Treasury bills, to be rolled over by banks given the increase in domestic liquidity. A narrowing fiscal deficit will reduce gross financing requirements in 2019 and 2020. The clearance of arrears, which added to the government's financing needs in each year since 2015, has steadily declined and Moody's doesn't expect the government to require additional cash payments to clear further arrears. As a result, gross funding needs will decline to around 12% of GDP by 2020, down from 15% of GDP in 2018. Beginning in early 2018, a pickup in banking sector liquidity increased scope for the government rely more on domestic financing. In the second half of 2018, the government has been able to refinance maturing Treasury bills with domestic banks at lower borrowing costs. Based on the increase in excess reserves in the banking system, and continued growth in bank deposits, which provides a funding source to investment in government securities, Moody's sees greater scope for the domestic banking sector to increase its holdings of government securities without increasing domestic liquidity risks. Lower inflation and the expected gradual reduction in the government's deficit to 5% of GDP by 2020, from a peak of 11% of GDP on a cash basis in 2016, should also contribute to supportive market sentiments and funding costs domestically. In addition, the government intends to rely on concessional external borrowing from multilateral creditors like the IDB and bilateral creditors, in particular China, with no plans to access commercial external borrowing. The government faces very little in the way of external amortizations in the coming years. The government's only outstanding Eurobond, which it issued in 2016, matures in 2026. The resignation of the Central Bank Governor in February 2019, at the request of the government, is unlikely to change funding conditions and therefore Moody's assessment of liquidity risk. Moody's expects the central bank, under a new governor, to provide more support to the government's fiscal operations, including through the temporary provision of liquidity as allowed for under current legislation. However, Moody's doesn't anticipate the change in leadership at the central bank to materially affect the government's fiscal stance. RATIONALE FOR THE RATING AFFIRMATION AT B2 STABLE MACROECONOMIC CONDITIONS SET AGAINST STRUCTURAL AND ECONOMIC VULNERABILITIES AND WEAK INSTITUTIONAL CAPACITY Moody's decision to affirm the B2 rating is supported by the country's sizeable mining and hydrocarbon resources, a favorable investment environment driven by mining activity and improved growth prospects in the medium-term. Suriname's economy continues to emerge from the deep contraction in 2015-16, with economic growth increasing to 2.7% in 2018, up from 1.9% growth in the prior year. The recovery is supported by increased gold production and higher prices, with spillover to the rest of the economy. The stabilization of the exchange rate, and inflation trending down to single digits, also support the economic recovery. The economy's shock absorption capacity is low given its small size and high reliance on commodities, namely gold and oil, which account for more than 80% of exports and 30% of government revenue. Looking beyond the short-term rebound, medium-term growth prospects, which Moody's estimates around 2.5%, will depend on future investment in the mining sector. Upside risks stem from future mining and oil discoveries, while downside risks relate to a decline in commodity prices. THE GOVERNMENT DEBT BURDEN WILL REMAIN HIGH, BUT IN LINE WITH SIMILARLY-RATED PEERS Suriname's debt burden remains a rating constraint but will stay close to the B-rated median, while debt affordability will improve. Government debt peaked at close to 80% of GDP in 2017, but is now expected to stabilize at around 60% of GDP, close to the B-rated median of 56% of GDP in 2018. Suriname's debt affordability, as measured by the ratio of interest payments to government revenue, worsened materially due to an increase in debt and a shift in the composition of debt toward more expensive sources of financing, increasing to 14% in 2018. However, as the debt level stabilizes, and revenue increases, Suriname's debt affordability will improve to levels in line with the B-rated median of 10%. Under Moody's baseline scenario -- gradual progress with fiscal consolidation -- projected debt accumulation is marginal, driven mostly by primary deficits. Moody's expects government debt will remain slightly above 60% of GDP, which is relatively high to sustain for a small economy that has displayed high vulnerability to external shocks. In this baseline scenario, revenue will increase as a result of mining and non-mining revenue, with only a very modest reduction in overall government spending. REDUCED EXTERNAL VULNERABILITIES DUE TO SMALLER CURRENT ACCOUNT DEFICITS AND ACCUMULATION OF RESERVES Suriname's current account has seen a significant adjustment, with the current account deficit moving to a nearly balanced position in 2017, following a deficit of more than 16% of GDP in 2015. The improvement was driven by the opening of a new gold mine in late 2016 and higher gold prices, which resulted in the trade balance moving to a surplus position by 2017. Moody's expects a current account deficit of around 2-3% of GDP in 2019 and 2020, compared to 3% of GDP in 2018. The current account balance will improve once Newmont completes accelerated depreciation of its capital costs related to the Merian mine, which will reduce the profit remittances of the company and reduce the primary income deficit. By 2020, an increase in gold exports following the beginning of production at the Saramacca mine in late 2019, will further boost export earnings. The modest current account deficit combined with FDI inflows, which averaged 5.5% of GDP between 2013 and 2017, will support a gradual increase in international reserves. At the end of December 2018, international reserves increased to $581 million, an increase of $133 million compared to December 2017. The increase mainly reflects the Staatsolie syndicated loan transaction in May 2018, when the company raised $625 million. Moody's expects international reserves to grow at a pace consistent with maintaining an import coverage ratio of around 4 months. WHAT COULD CHANGE THE RATING DOWN Suriname's sovereign rating could be downgraded in the event of a deterioration in fiscal performance that led to an increase of government debt ratios or a material weakening of economic growth prospects, given the lower than expected economic and fiscal strength that environment would imply. A material increase in government liquidity risk -- as reflected in an increase in domestic borrowing costs or limited external funding options -- would weigh on the rating. WHAT COULD CHANGE THE RATING UP Moody's would consider upgrading the rating if a sustainable narrowing of the fiscal deficit were to indicate that a material decrease in government debt metrics was likely, particularly if accompanied by fiscal measures to broaden and diversify the revenue base, through measures to increase non-mining revenue. GDP per capita (PPP basis, US$): 14,915 (2017 Actual) (also known as Per Capita Income) Real GDP growth (% change): 1.9% (2017 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 9.3% (2017 Actual) Gen. Gov. Financial Balance/GDP: -8.7% (2017 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: -0.1% (2017 Actual) (also known as External Balance) External debt/GDP: 101.9% (2017 Actual) Level of economic development: Low level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On February 27, 2019, a rating committee was called to discuss the rating of the Suriname, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have decreased. The issuer's fiscal or financial strength, including its debt profile, has decreased. The issuer has become less susceptible to event risks. The principal methodology used in these ratings was Sovereign Bond Ratings published in November 2018. ================= V E N E Z U E L A ================= VENEZUELA: Guaido Plans Return; Maduro Expels Univision's Ramos --------------------------------------------------------------- EFE News reports that Venezuelan self-proclaimed acting president Juan Guaido was planning his return to Caracas just as Univision news anchor Jorge Ramos and his team were returning to Miami after Venezuela's incumbent president, Nicolas Maduro, ordered them deported. Mr. Guaido traveled to the Colombian border city of Cucuta for a concert organized by British billionaire Richard Branson, meant to raise money for humanitarian relief in Venezuela, according to EFE News. The opposition leader remained in Colombia for what turned out to be an abortive effort to bring US humanitarian aid into Venezuela, which is suffering from hyperinflation and shortages, the report relays. The report notes that Mr. Guaido took part in a gathering in Bogota with US Vice President Mike Pence and representatives of the so-called Lima Group. The United States is in the vanguard of the roughly 50 countries, including the major European powers except Italy, that have recognized Guaido, the report relays. Founded in the Peruvian capital in August 2017, the Lima Group comprises Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Guyana and St. Lucia. Mexico, however, has distanced itself from the group since the other members recognized Guaido as Venezuela's legitimate leader over Maduro, the report says. After meeting, Mr. Guaido said on Caracol Television that he would return to Caracas to resuming "exercising" his functions as interim president, the report notes. Until two weeks ago, Mr. Guaido had not set foot outside Venezuela since declaring himself acting head of state on Jan. 23, the report relays. Venezuela's Supreme Court, which supports Mr. Maduro, barred Guaido from leaving the country while he remained under investigation for his attempt to seize power, the report discloses. But Mr. Guaido said that he was "not under any order," dismissing Venezuela's attorney general and Supreme Court as usurpers, the report relays. Mr. Ramos and his Univision colleagues arrived back in Miami after spending hours in custody in Caracas in the wake of a contentious interview with Mr. Maduro at the presidential palace, the report relays. Mr. Ramos and his team were detained after Mr. Maduro became upset over the broadcaster's questions and a video he showed the Venezuelan leader, the report notes. "I asked him if I can call him either a president or a dictator because millions of Venezuelans do not consider him a president. Then we discussed the flood that happened here, May 2018, also the reports of torture and human rights abuses of political prisoners," Mr. Ramos said in a video aired by Univision, the report discloses. "And at the end, I showed him a video that I personally took of three kids behind a trash truck, looking for food. And, he just couldn't stand it. He did not want to continue the interview," Mr. Ramos added. Mr. Ramos said that Communications Minister Jorge Rodriguez then declared the interview unauthorized and "confiscated all our cameras, all our video, all our cell-phones," the report says. Mr. Maduro's administration has repeatedly claimed that the press, particularly foreign media, spreads misinformation about the crisis in Venezuela, the report relays. On his return to Miami, Mr. Ramos challenged Maduro to release the video footage that was seized by Venezuelan authorities, the report notes. Representatives of the US and Venezuela crossed swords in the UN Security Council during a special session on the situation in the Andean nation, convened at Washington's request, the report discloses. "We call on the members of the Security Council to join us in meeting the growing needs in Venezuela and the region. We call on member states to consider what resources and tools they have to contribute to Venezuelan democracy and to pressure the illegitimate Maduro regime to peacefully step down," the US special representative for Venezuela, Elliott Abrams, said, the report relays. He said that the world should back Guaido and "address the destabilizing results of Maduro's corrupt, fraudulent and incompetent reign, which brought instability and violence" to the borders of Brazil and Colombia, the report notes. Mr. Abrams was referring to clashes that occurred as Guaido supporters tried to force their way into Venezuela with US-donated aid rejected by Maduro as a stalking horse for military invention, the report notes. Four people died on the Brazilian border and more than 200 others were injured in disturbances on the boundary with Colombia, the report relates. In his remarks, Venezuelan Foreign Minister Jorge Arreaza asked the Security Council to pass a resolution rejecting "the threat and the use of force" against his country, the report says. Citing what he described as US preparations for war in Venezuela, he urged the council to "exclude that option completely," after Abrams reiterated Washington's "all options are on the table" position, the report notes. The foreign minister said that the violence on the Colombian border was initiated by Guaido supporters who accompanied the trucks loaded with aid, emphasizing that most of the wounded were members of the Venezuelan security forces, the report notes. "That was the last chapter in the coup," he said, before directly addressing Abrams in English: "Read my lips -- it failed. Now is the time for us to return to sanity," the report adds. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. VENEZUELA: Oil Supplies Hit 5-Year High as Buyers Become Elusive ---------------------------------------------------------------- EFE, citing Dow Jones Newswires, reports that Venezuela's oil inventories have climbed to their highest levels in five years, according to satellite data, a sign that United States sanctions are stifling sales and could continue to drive up global prices. In January, the US imposed sanctions on Venezuela's state-owned oil giant, Petroleos de Venezuela SA, according to EFE. The measures are intended to cut off proceeds from US crude sales to the government of President Nicolas Maduro and funnel funds to opposition leader Juan Guaido, the report notes. The report relays that Venezuelan crude inventories reached 32.8 million barrels, a record high in data going back to January 2014, according to research firm Orbital Insight. Orbital Insight uses satellite imagery to gauge stockpiles of crude around the world, the report notes. Since the sanctions were announced Jan. 28, the amount of crude oil in Venezuela has climbed by nearly 2 million barrels, the firm's data show, the report says. Mario de la Ossa, energy specialist at Orbital Insight, said those stores are likely to keep building since the next largest importers of Venezuelan crude, China and India, are already well supplied, the report discloses. Orbital Insight data show that oil inventories have risen by about 5.6 million barrels in India this year and 17.6 million barrels in China, the Dow Jones report added, the report relays. "The big picture story for demand expectations globally is India and China," Mr. De la Ossa said, the report relays. But "inventories have been increasing quite aggressively," he added. Venezuela could face other challenges in sending more crude to Asia, said Michael Tran, global energy strategist at RBC Capital Markets, the report notes. The US Gulf Coast is an ideal destination because its refiners are able to take in dense Venezuelan crude, and its proximity means faster pay, he said. A longer voyage to Asia would mean delayed payments for crude, the report relays. Venezuela is also competing with other oil-producing nations to send more crude to Asia, where demand for oil is continuing to grow, Mr. Tran added. "It's actually quite difficult to essentially funnel all those Venezuelan barrels into Asia. Those battlegrounds are fiercely competitive from a market share perspective," the report quoted Mr. Tran as saying. Cargo-tracking firm ClipperData estimates that the biggest pick up in trade flows this month is oil bound for India, the report relays. A series of oil-for-loans agreements that China holds with Venezuela could also complicate crude purchases. Earlier this year, Chinese diplomats held debt negotiation talks with representatives of Guaido in an attempt to safeguard China's investments, The Wall Street Journal reported, the report notes. The possibility of further supply disruptions in Venezuela has helped lift global oil prices this year, the report says. Prices for the particular type of dense, high-sulfur oil that Venezuela has also gained recently, as other countries that produce a similar grade of crude have cut back on output. That could help cushion the blow of US sanctions, said Bob McNally, president of Rapidan Energy Group, the report relays. "It's making [Venezuelan] crude a little more valuable than it usually is," Mr. McNally said, the report discloses. "If Maduro is willing to discount it, he can probably place it," he added. US refiners need a mix of dense and light crude to churn out products like gasoline and diesel efficiently, and some have been forced to look elsewhere to replace the crude that would generally come from Venezuela, the Dow Jones report added, the report relays. Citgo Petroleum Corp., a subsidiary of Petroleos de Venezuela, and the largest US importer of Venezuelan crude last year through October, is losing supply at a time of year when inventories usually build, the report notes. Orbital Insight's analysis of satellite images shows a decline of about 530,000 barrels at Citgo refineries in the US since Jan. 28, the report relays. Citgo's offshore inventories in Aruba have dropped by more than 2 million barrels as well, as the refiner has turned to those stores for additional supply, Mr. De la Ossa added. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week February 25 to March 1, 2019 ----------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Cia Latinoamericana 9.5 60.447 7/20/2023 AR USD CSN Islands XII Corp 7 69.44 BR USD Agua y Saneamientos 6.625 71.982 2/1/2023 AR USD Banco Macro SA 17.5 50 5/8/2022 AR ARS Odebrecht Finance Ltd 7.5 39.15 KY USD YPF SA 16.5 50.96 5/9/2022 AR ARS Odebrecht Finance Ltd 4.37 35.715 4/25/2025 KY USD Odebrecht Finance Ltd 7.12 37.293 6/26/2042 KY USD China Huiyuan 6.5 75.1 8/16/2020 CN USD Odebrecht Finance 5.125 45.754 6/26/2022 KY USD Noble Holding 6.2 74.46 8/1/2040 KY USD Noble Holding 5.25 70.444 3/15/2042 KY USD Odebrecht Finance 7 58.985 4/21/2020 KY USD Noble Holding 6.05 73.508 3/1/2041 KY USD Odebrecht Finance 5.25 36.2 6/27/2029 KY USD Rio Energy SA 6.875 71.551 2/1/2025 AR USD BCP Finance Co 1.751 74.397 KY EUR Provincia del Chubut 4 10/21/2019 AR USD YPF SA 16.5 50.96 5/9/2022 AR ARS Argentina 7.125 76 6/28/2117 AR USD Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Odebrecht Finance 6 37.193 4/5/2023 KY USD Banco do Brasil 6.25 76.375 KY USD Cia Latinoamericana 9.5 60.621 7/20/2023 AR USD Polarcus Ltd 5.6 70 7/1/2022 AE USD Argentina 6.875 74.985 1/11/2048 AR USD Provincia del Chubut 7.75 72.304 7/26/2026 AR USD Banco Macro SA 17.5 50 5/8/2022 AR ARS CSN Islands XII Corp 7 74.375 BR USD Provincia de Rio Negro 7.75 70.153 12/7/2025 AR USD Provincia de Entre Rios 8.75 71.083 2/8/2025 AR USD Argentina 4.33 70 12/31/2033 AR JPY Provincia de Entre Rios 8.75 72.333 2/8/2025 AR USD Odebrecht Finance Ltd 4.375 35.242 4/25/2025 KY USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Odebrecht Finance Ltd 7.125 38.674 6/26/2042 KY USD Odebrecht Finance Ltd 5.25 36.187 6/27/2029 KY USD Province of Santa Fe 6.9 74.177 11/1/2027 AR USD Provincia del Chubut 7.75 71.654 7/26/2026 AR USD Argentina 6.25 72.711 11/9/2047 AR EUR Cia Energetica 6.1827 1.105 1/15/2022 BR BRL Odebrecht Finance 7.5 43.5 KY USD Argentina 0.45 31.75 12/31/2038 AR JPY SACI Falabella 2 7/15/2020 CL CLP Province of Jujuy 8.625 72.788 9/20/2022 AR USD Province of Santa Fe 6.9 73.44 11/1/2027 AR USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Tanner Servicios 3.8 52.42 4/1/2021 CL CLP AES Tiete Energia SA 6.78 1.06 4/15/2024 BR BRL Odebrecht Finance Ltd 6 37.19 4/5/2023 KY USD Provincia de Rio Negro 7.75 70.15 12/7/2025 AR USD Odebrecht Finance 7 59.466 4/21/2020 KY USD Odebrecht Finance Ltd 5.12 47.298 6/26/2022 KY USD Provincia de Cordoba 7.12 74.286 8/1/2027 AR USD Argentina 7.125 75.752 6/28/2117 AR USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Enlasa Generacion 3.558 11/15/2023 CL CLP Metrogas SA/Chile 645 8/1/2024 CL CLP Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Provincia del Chaco 9.375 72.315 8/18/2024 AR USD Fospar S/A 6.53 1.034 5/15/2026 BR BRL Sociedad Concesionaria 2.9547 6/30/2021 CL CLP Esval SA 3.453 3/15/2028 CL CLP Caja de Compensacion 7.75 35.23 3/27/2024 CL CLP Sociedad Austral 318.478 9/20/2019 CL CLP Provincia de Neuquen 7.5 74.753 4/27/2025 AR USD Caja de Compensacion 5.2 9/15/2018 CL CLP Empresa de Transporte 4.341 7/15/2020 CL CLP Corp Universidad 5.968 11/10/2021 CL CLP Provincia de Cordoba 7.125 74.802 8/1/2027 AR USD Provincia del Chaco 9.375 72.585 8/18/2024 AR USD Argentine Republic 7.125 75.322 6/28/2117 AR USD Sylph Ltd 2.367 61.194 9/25/2036 KY USD Banco Security SA 311 7/1/2019 CL CLP Sylph Ltd 2.657 73.081 3/25/2036 KY USD ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *